BOJ seen spending up to $478 million under bank aid scheme: central bank official

FILE PHOTO: A man wearing a protective mask walks past the headquarters of the Bank of Japan amid the coronavirus disease (COVID-19) outbreak in Tokyo, Japan, May 22, 2020.REUTERS/Kim Kyung-Hoon

TOKYO (Reuters) - The Bank of Japan is estimated to spend up to 50 billion yen ($478 million) under a new scheme aimed at incentivising regional banks to consolidate, a senior central bank official said on Tuesday.

If all regional lenders with accounts at the BOJ were to meet requirements to apply for the scheme, the BOJ will likely pay around 40-50 billion yen to these lenders, BOJ Executive Director Kimihiro Etoh told parliament.

The BOJ unveiled earlier this month a scheme under which it pays 0.1% interest to regional lenders that cut costs, boost profits or consolidate.

Reporting by Leika Kihara; Editing by Chris Gallagher